Russian Oligarchs Flee
To Safety In Israel Yukos Oil Fugitives Find Safe
Haven In The Promised Land
The Financial Times - UK
By Harvey Morris
3-24-5

For the Russian government, they are allegedly dangerous
criminals who have made off with billions in unpaid taxes and are wanted
on charges that range from embezzlement to murder. For Israel, they are
potential valued investors in the country's slowly reviving economy.

Two of Israel's normally publicity-shy Russian "oligarchs"
this week surfaced to announce their first investment in Israel since they
sought refuge there 18 months ago in the wake of the debacle over Yukos,
the Russian oil company.

In an interview with the FT, Leonid Nevzlin and Michael
Brudno, whose Menatep group owns 60 per cent of Yukos shares, outlined
a business strategy based on the likelihood that they will not be returning
to Russia anytime soon.

The two men live a hundred yards from each other in the
affluent anonymity of Herzliya, an upscale suburb north of Tel Aviv. Propped
against a wall of Mr. Nevzlin's living room is a "Free Khodorkovsky"
placard in honour of Mikhail Khodorkovsky, the Yukos founder jailed in
Russia in October, 2003 on tax evasion and fraud charges.

The two men and their partner, Vladimir Dubov, took out
Israeli citizenship at about the same time, setting up home in Israel in
the hope of avoiding extradition over their alleged role in the Yukos affair.
As well as the fraud-related charges, Mr Nevzlin is also wanted in Russia
for conspiracy to murder.

Mr Nevzlin rejected all the accusations against him and
his partners and said they were part of an ideological campaign by Vladimir
Putin, Russian president, against the Russian private sector. "It
has been totally developed by the [former] KGB, which has a lack of tolerance
for anything it does not control. This is a long-term consequence of Stalinism."

Yukos lost 60 per cent of its oil production capacity
when the Russian government ordered it to sell off its main subsidiary
in December to pay back-taxes. The buyer, state-owned Rosneft, has since
filed an $11bn suit against Yukos.

Mr Nevzlin said: "The Yukos story is not over yet.
The volume of illegal tax claims would be enough to confiscate the rest
of the company."

Describing the Rosneft claim as "complete bullshit",
Mr Brudno claimed it had been filed on orders from the Kremlin.

Announcing their investment in Israel, the two men said
Menatep was acquiring a stake in the holding company of Israel Petroleum
Enterprises.

They said they would be looking into further investments
in fields within the group's area of expertise. Menatep already has about
$100m invested in telecoms companies in eastern Europe.

Although the Russian tycoons have maintained a low profile
since moving to Israel, they have not managed to escape controversy.

Mr Nevzlin's name was among those raised in connection
with a current Israeli police investigation into the alleged laundering
of at least $500m through a branch of Bank Hapoalim, Israel's largest bank.

"I've had no problems with the authorities,"
he said. "Everything is quite

transparent if you look at my assets. So much time has
passed since they started the investigation, they would have had a chance
to look at my accounts."

In an indication of how important Israel regards investment,
Benjamin

Netanyahu, finance minister, recently said the money-laundering
case had been blown out of proportion.

"Israel will lose a lot if some TV viewers think
that the country does not need immigrants from the former Soviet Union
and can afford to reject investments," he told the RTV1 satellite
channel, owned by Vladimir Gusinsky, an exiled Russian media magnate.